Any non-flammable blocks will "fizzle" and make a few puffs of smoke whenever you try to set them on fire. If you are close to the block you try to set on fire, the puffs of smoke will be really small, but if it is far away the puffs will look huge.

No I'm not talking about the puff. It's just that the flames appear on the sides instead of the top. And the weird thing is that the sides are closed in by other blocks just like in a flat map.

Oh yes, that's a bug.

@Beanpp88: It's supposed to look more realistic, like the way it looked in Eden 1.7. With fire on all sides including the top, and smoke that doesn't look too big or too small depending on how far away you are.